Canada not making concessions needed for a NAFTA deal, says U.S.

The U.S.is moving forward on its bilateral trade deal with Mexico even if Canada is left out because negotiators can't resolve their sharp differences over dairy and a dispute resolution system, U.S. Trade Representative Robert Lighthizer said.

The administration of President Donald Trump has recently begun increasing the pressure on Canada, urging it to conclude a deal by September 30 or face exclusion from a revised North American Free Trade Agreement.

"There's still a fair amount of distance between us".

In a strident speech to the United Nations Tuesday, President Donald Trump said the US will not be taken advantage of in trade agreements - a threat that comes as a deadline to sign a NAFTA deal with Canada fast approaches.

"Canada's not making concessions in areas we think are essential", Lighthizer said.

"Canada would like to be in the agreement".

The chief USA trade negotiator is scheduled to meet with Canadian Foreign Minister Chrystia Freeland on the sidelines of the annual United Nations General Assembly meeting in NY.

Trump has threatened to impose tariffs on Canadian cars if Canada does not come to an agreement with the U.S. Lighthizer said he doesn't know where Trump's thinking stands on auto tariffs.

"They (the United States and Mexico) made certain agreements", he said.

The Trump administration says the text of a deal is needed by Saturday to allow the Mexican government to sign it before leaving office on Nov 30.

Negotiations aimed at a new agreement have been underway for 13 months, but Canada and the USA remain at loggerheads. "I think it's important to keep North America together, even if it takes more time" he said.

Trudeau said Section 232 tariffs on steel and aluminum, enacted on grounds of national security, are "a tool that the president has to use and he is using them because I think there's a sense that there are other tools that have to go through Congress that he doesn't get to use". "There are very large issues", Lighthizer said, playing down chances of a deal with Canada. "We don't want to do this, we're raising prices for consumers, but we can not not respond to punitive tariffs that don't make a lot of sense".

Mr. Lighthizer also suggested that Canada and Mexico can not expect swift relief on steel and aluminium tariffs, which the USA imposed on its NAFTA partners in June.

Whether the US could actually proceed with a separate bilateral deal with Mexico, absent Canada, is a matter of debate. He said that he originally hoped to reach some agreement on the tariffs as part of NAFTA talks, but now is focused on finishing NAFTA first before negotiating a separate deal on the tariffs.